Nio, a Chines electric vehicle maker, recorded poor results in the past quarter, with a 54.6% sales drop from the one before.
The number of deliveries of the ES8, Nio’s flagship SUV, dropped from 7,980 units in the fourth quarter of 2018 to 3,989 in the past quarter. Its net loss saw a 71.4% increase to USD 390.9 million last quarter from the same period of 2018.
And things aren’t immediately looking up. “In the second quarter, we expect an even more challenging sales environment and anticipate overall sequential demand and deliveries to decrease, as competition continues to accelerate and the general automobile market in China remains muted,” Nio’s CFO Louis Hsieh said commenting on the company’s financial report.
But amid the gloom, Nio disclosed a new framework agreement with Beijing E-Town International Investment and Development (E-Town Capital), a company backed by the Yizhuang district government.
According to this agreement, Nio and E-Town Capital will set up a new entity, Nio China. E-Town will inject up to RMB 10 billion (almost USD 1.5 billion) in Nio China for a minority stake.
E-Town Capital is also expected to help Nio China find additional partners to build a new manufacturing facility for the company’s new vehicles.
Although the framework agreement is not a binding contract and both sides are still finalizing the details of their cooperation, it should come as a boost of morale to the Chinese EV maker.
Nio is currently facing class action lawsuits brought on by shareholders in the US over “misleading statements”. The company has also scrapped plans to build its own manufacturing plant in Shanghai.